A study found that countries perceived as "low-priority" markets in the games industry, such as Brazil and Russia, are reaching parity with major Western markets thanks to increased online and social spend.
The 2011 National Gamers Surveys, conducted by international market research firm Newzoo and sponsored by GlobalCollect, surveyed more than 20,000 people in Brazil, Russia, Mexico, Spain, the US, and key EU countries, and covered the majority of gaming platforms, from console and PC to mobile and online casual games.
The results revealed that an average of 50 percent of consumers who play games actually spend money on games. The number of people actively playing games ranges from 16 million in Mexico to 35 million in Brazil to 38 million in Russia. The study found that two-thirds of the total game budget in the surveyed regions was spent online.
The research also noted that, for the first time, online, downloaded, and mobile games spending passed total retail boxed sales in Western countries.
"Low-priority" emerging markets such as Brazil and Russia are growing at a huge rate, the survey noted. It was found that 75 percent of the active internet population in these countries play games -- in fact, more spend time on computers than watching television.
Peter Warman, CEO and co-founder of Newzoo, said in a statement to Gamasutra, "Everyone in the games industry has a gut feeling that the new online and mobile free-to-play business models are accelerating growth in emerging markets, not only in number of players but also in money spent."
"It is exciting to finally see concrete numbers on these markets, and being able to benchmark these with Western countries as well as zoom in on who is actually spending and what they are buying."
I came from Brazil and I have a guess on why people seems to spend more online: lower taxes. I believe a person in Brazil can buy a game right off of Steam paying the amount in Dollars with an international credit card, thus avoiding the abusive (usually 67%) taxes applied to imported games in the country.
It would be good if the survey commented on the percentage of people that spend on full games and the percentage that spend on social titles.
Also, smartphones in Brazil have been fairly expensive - I don't know if the installed base there is expressive enough (I don't know about now as I have not been in the country for 2 years, but I doubt it has changed considerably).
I work in a smartphone programming company... And we have less smartphones than programmers.
So, no, smartphones are not THAT popular.
Also, yes, buying on steam outright avoid taxes... (while according to a federal deputy here in a law project that he wrote, a console game may be taxed 273% to the end costumer based on its import price... so if EA Brazil imported something from EA US for only the royalty value, like 20 USD, the end costumer will pay 20 USD + 273% of 20 USD + the usual profits of everyone in the chain)
Indeed, the same situation happens in Argentina. You may find games in retail store bins with a price tag of 60-100 USD that you can get by 10-20 USD on Steam. That's really a deal breaker.
Hi Nicolas & Fabian, I just did a dive in our data tool. 6.4M Brazilians pay for social games vs 7.4M for game downloads. The latter figure is comparable to the number of people spending money on console games. Total spending on social games is 58% of that what is spent on console games. Can't give you too much otherwise our clients will hang me, but please let me know what questions you have. By the way, there indeed are a lot of people who download via Steam in Brazil. More than twice as many as in the UK. But most do not pay and download free stuff.
Probably because Steam in Brazil is mandatorily popular (ie: the most popular game in Brazil, at least until 2 years ago, is Counter-Strike, and recent versions have Steam as mandatory... thus downloading Trackmania, Alien Swarm, or Multiplayer Half-Life, that was free for nVidia owners, is a easy step, it is interesting to note that people use Steam to play even pirated Counter-Strike, because of the ease of use, of course on non-VAT servers, that is also good for Valve, I know a good amount of pirates that end promoting Steam and driving sales. Disclaimer: I AM NOT DEFENDING PIRACY, I AM ONLY EXPLAINING THE STATS FROM THE VIEWPOINT OF A BRAZILIAN THAT IS INVOLVED IN ANTI-TAX ORGANIZATIONS).
Thanks for the reply, Peter! It is really interesting knowing that almost half of the people that spend online in Brazil do so in social games. I would not expect it to be this much, but I guess it makes sense since those are small (and cheaper) transactions.
Most of the population does not have enough money to spend on this sort of product (entertainment), thus the low attach rate in comparison with the overall population (35 million is less than 20% of the country). I guess the social games can benefit from a larger portion of the people in the country since its cost is usually 30 to 50 times lower than a full retail game.
There also another barrier that online transactions still suffer from skepticism in many levels here in Brazil. Mostly total digital savvy people will tend to follow tendency in this case. I would like to know if the study includes physical credits/points cards, sold in small stores around, how much volume do MS and LevelUp see with these strategies?
It would be good if the survey commented on the percentage of people that spend on full games and the percentage that spend on social titles.
Also, smartphones in Brazil have been fairly expensive - I don't know if the installed base there is expressive enough (I don't know about now as I have not been in the country for 2 years, but I doubt it has changed considerably).
So, no, smartphones are not THAT popular.
Also, yes, buying on steam outright avoid taxes... (while according to a federal deputy here in a law project that he wrote, a console game may be taxed 273% to the end costumer based on its import price... so if EA Brazil imported something from EA US for only the royalty value, like 20 USD, the end costumer will pay 20 USD + 273% of 20 USD + the usual profits of everyone in the chain)
Most of the population does not have enough money to spend on this sort of product (entertainment), thus the low attach rate in comparison with the overall population (35 million is less than 20% of the country). I guess the social games can benefit from a larger portion of the people in the country since its cost is usually 30 to 50 times lower than a full retail game.